Value Chain Governance and Access to Finance: Maize, Sugar Cane and Sunflower Oil in Uganda

Value chain finance leverages value chain relationships in order to successfully screen clients, monitor their activities, and enforce formal or informal credit contracts. Value chain relationships allow value chain lenders to resolve the same problems that financial institution lenders face: knowing whether the client will be able to repay, and deciding whether the client will be willing to repay.

The value chain governance structure is important in determining how well a finance provider within the value chain can screen and select clients, how well it can monitor their activities, and how effectively it can enforce contracts. Three value chains in Uganda were analyzed to better understand the relationship between governance and value chain finance.

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